Daily Market Update

by Jamie Henry14 Aug 2014

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Daily Market Update

European shares down on weak data, Asian markets up on earnings
The fragile recovery of the Eurozone economy has been dealt a double blow with data from Germany showing the country’s economy shrunk in Q2; which had not been expected and France also failed to grow. With the two biggest Eurozone economies floundering and the Russia-Ukraine situation causing concern, investors will be looking for stimulus measures from the ECB to boost confidence in the region. Asian markets ended Thursday largely higher following healthy earnings reports from Australian companies, although weak data from China kept Hong Kong and Shanghai from seeing any gains. Poorer-than-hoped results from Japan’s machinery sector took the edge of a rise in the Nikkei which was boosted by tech stocks. US futures are slightly weaker.

Today’s data
Weekly jobless claims report from the US Labor Department at 8.30am ET.
Wal-Mart and Kohl’s report earnings pre-trading and JC Penney and Nordstrom are among those reporting after the closing bell.

Gold – the rush downwards
A report published today by the World Gold Council shows a drop in demand of 16 per cent in the past year. A sharp decline in Q2 of last year was followed by a rally in demand later in the year and into 2014. Much of the fall in demand in Q2 2014 is attributed to Asia especially China and India due to economic uncertainties. The drop would have been greater but there is still a demand for gold in the US and UK and many other western markets. The report suggests that the drop in Q2 is more of a correction than a slump, highlighting that demand is near the five year average. Read the full story.

Stated income mortgages for investors
Those who cannot prove their income are getting access to mortgage loans, but it’s a different offer to the so-called ‘liar loans’ of the past. Firms are offering the loans to small businesses and investors who are buying for the rental market. They will need to demonstrate assets to cover 6 to 12 months worth of payments and will need large down payments. None of the big banks are offering the mortgages and the market is small but it has created an opportunity for some smaller lenders and for investors with cash but no history. Read the full story.

Opportunity through tragedy
It’s a fact that when a disease becomes more prolific it creates a massive opportunity for pharmaceutical companies and that is currently the case with Ebola. While the drugs companies have largely ignored the disease as it is sporadic and highly regional, they are now looking at their existing and developing drugs to see if there is anything that could tackle the virus. Investors are watching the sector, especially some of the smaller companies, as a breakthrough could be hugely profitable. Read the full story.